Boku Inc.

BOKU INC. (“Boku”) Chairman’s Corporate Governance Statement 2021

Chairman’s Introduction

Dear Shareholder,

Part of my role as Chairman is to ensure that the highest levels of corporate governance are maintained throughout the Company and also at Board level.

I recognise the importance of, and we as a Board are committed to, high standards of corporate governance, aligned with the needs of the Company and the interests of all our stakeholders.

My fellow directors and I fully appreciate the importance of sound governance in the efficient running of the company, and in particular in the effectiveness and independence of the Board. The following report sets out how we do this. It also covers how the Board and its committees operated in 2020 and how we have continued to comply with the principles of the QCA Corporate Governance Code (the “QCA Code”).

Mark Britto
Non-executive Chairman
15 March 2021

Statement of Compliance

Application of the QCA Corporate Governance Code

Deliver Growth

 PrincipleApplication
1Establish a strategy and business model which promote long-term value for shareholdersAt Boku we seek to develop an entrepreneurial and supportive culture across our business so that these values are integral to everything else we do.

An explanation of the Company’s business model and strategy, including key challenges in their execution (and how those will be addressed) is included on pages 4 to 9 of the Annual Report.
2Seek to understand and meet shareholder needs and expectationsThe Board engages with shareholders via a variety of channels and activities including the annual general meeting, updates to shareholders via its reporting and the regulatory news services, institutional and retail investor presentations and investor roadshows, all of which provide an opportunity for shareholders to engage directly with senior management and the Board.
3Take into account wider stakeholder and social responsibilities and their implications for long-term successBoku’s culture is very open and this includes reaching out and seeking feedback on a regular basis through employee opinion surveys. The Board regularly considers the key stakeholder relationships which give the Company its competitive advantage and thereby contribute to its long-term success. The key stakeholders are the skilled people employed by the Company and its merchant and carrier relationships, together with other service providers. These relationships are regularly monitored by the Board.
4Embed effective risk management, considering both opportunities and threats, throughout the organisationThe Board retains overall responsibility for identifying the major business risks faced by the Group by setting both the framework and risk appetite of the Group, in line with best practice. Our risk management framework and approach to risk is summarised on pages 20 to 23 of the Annual Report.

Maintain a Dynamic Management Framework

 PrincipleApplication
5Maintain the board as a well-functioning, balanced team led by the chair.The QCA Code requires that boards have an appropriate balance between executive and non-executive directors and that each board should have at least two independent directors. The Board is currently made up of a Non-Executive Chairman (Mark Britto), two Executive Directors: the Chief Executive Officer (Jon Prideaux) and the Chief Financial Officer (Keith Butcher) and three Non-Executive Directors (Richard Hargreaves, Stewart Roberts and Charlotta Ginman). Three of these directors are considered independent.

The Board is supported by an appropriate committee structure, comprising of separate Audit and Remuneration Committees that have the necessary skills and knowledge to discharge their duties and responsibilities effectively.

Further details of the current directors and a note of those who are considered to be independent are set out on page 24 of the Annual Report.
6Ensure that between them the directors have the necessary up-to-date experience, skills and capabilitiesThe Board is satisfied that its directors have an effective and appropriate balance of skills and experience, and that there is a suitable balance between independence of character and judgement, and knowledge of the Company, to enable it to discharge its duties and responsibilities effectively. All directors are encouraged to use their independent judgement and to constructively challenge all matters, whether strategic or operational.

The current directors, their background and experience are described on pages 24 to 25. Collectively, our team has all the necessary skills and experience, to carry out the Group’s strategy and business model effectively.

Richard Hargreaves is the senior independent director and he is available to speak with shareholders concerning the corporate governance of the Company. The Company Secretary, Deepa Kalikiri is responsible for advising the Board on governance matters and ensuring that decisions of the Board in relation to governance matters are implemented.

The latest review of Board effectiveness did not highlight any areas of concern. Additionally, neither the Chairman nor Chief Executive have received any representations to this effect.
7Evaluate board performance based on clear and relevant objectives, seeking continuous improvementThe Board has undertaken a formal annual evaluation of its own performance, including of the Company’s committees.

The evaluation demonstrated overall positive results of the performance of the Board and committees, by recognising the strengths and addressing ways of improvement where appropriate.

Appropriate training is also available to all directors to develop their knowledge and ensure they stay up to date on matters for which they have responsibility as a Board member.

Board composition is reviewed regularly, with Charlotta Ginman, Non-Executive Director, appointed in September 2020.
8Promote a corporate culture that is based on ethical values and behavioursThe Company’s culture is guided by many different activities, which include regular senior management meetings and feedback following the employee surveys. Such surveys provide an insight to the views of the workforce on the Company.

The Company’s policies set out its zero-tolerance approach towards any form of discrimination or unethical behaviour relating to bribery, corruption or business conduct in all jurisdictions in which it operates. A recruitment policy, used consistently across the business is in place, which together with training and policies on whistleblowing and anti-bribery assist in embedding a culture of ethical behaviour for all employees.

An outline of the corporate culture promoted by the Board is set out in the section of the Company’s website headed Core Values.
9Maintain governance structures and processes that are fit for purpose and support good decision-making by the BoardFormal Board meetings are held every two months to review strategy, management and performance of the group. Additional meetings between those dates are convened as necessary. We have two Board committees: the Audit Committee and the Remuneration Committee.

The terms of reference of both these committees have been revised to reflect the principles of the QCA Code. The terms of reference can be viewed at https://www.boku.com/investor-relations/reports-documents

Due to the current size of the Company, the Board still considers a Nominations Committee is not appropriate, any decisions relating to appointments to the Board will be a matter for the consideration of the whole Board.

From time to time, separate committees may be set up by the Board to consider specific issues when the need arises.

The roles and responsibilities of the Chairman, Chief Executive and any other directors who have specific individual responsibilities or remits (e.g. for engagement with shareholders or other stakeholder groups) are set out on page 32 of the Annual Report.

The principal responsibilities of Board members are as set out below:

Amongst other things the Chairman is responsible for:
- Promoting the highest standards of corporate governance and ethical leadership
- Developing effective working relationships with the Executive Directors
- Promoting effective relationships between all Board members
- Setting the agenda for Board meetings and ensuring that sufficient time is devoted to the consideration of agenda items and that each director can express their views on matters
- Ensuring that the Board monitors and determines the nature of the significant risks the Company embraces in the implementation of its strategy
- Ensuring the Company maintains effective communications with shareholders and other stakeholders and that the Board as a whole is made aware of shareholder and stakeholder issues and concerns.

The Chief Executive is responsible for the following matters amongst others:
- Developing and implementing strategy following approval by the Board
- Reporting on a regular basis to the Board of progress in respect of strategy, Company performance and business matters
- Developing the senior management teams and creating the appropriate organisational environment to deliver the strategy
- Acting as the principal spokesman for the Company

The Chief Financial Officer is primarily responsible for the delivery of high quality information to the Board on the financial position of the Company.

The Non-Executive Directors are responsible for providing a challenge to the Executives where required and to make the Board aware of their views on matters before Board decisions are made. They must be able to devote sufficient time to develop their knowledge and skills to be able to make a positive contribution to the Board.

The Board has a schedule of matters reserved for the Board which requires the following key matters to considered and approved by the Board:
- Strategy and overall management of the Group
- Financial reporting and controls
- Ensuring a sound system of internal controls
- Approval of major capital projects and contractors
- Communication with shareholders
- Board membership and appointments
- The Remuneration Policy
- Delegated authorities
- Corporate governance matters
- Approval of key policies

The Board and its committees receive appropriate and timely information before each meeting, a formal agenda is produced for each meeting, and Board and committee papers are distributed several days before meetings take place allowing all Board members to contribute even if they cannot attend. Any director can challenge proposals, and decisions are taken democratically after discussion. Any director who feels that any concern remains unresolved after discussion may ask for that concern to be noted in the minutes of the meeting, which are then circulated to all directors. Specific actions arising from such meetings are agreed by the Board or relevant committee and then followed up by management.

The Board continues to receive departmental ‘deep dives’ during the Board meetings, which has strengthened the Board’s exposure to the executive committee and other senior management.

The Board is satisfied that the governance arrangements for the business remain appropriate and that the delegations in place are effective and with strong oversight and controls. This is, of course, subject to regular Board and managerial oversight and review.

Build Trust

 PrincipleApplication
10Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholdersReports on the work of the Board and its committees are set out, in the Annual Report, as follows:
- Board: pages 44
- Audit Committee: pages 34
- Remuneration Committee: pages 37
Information about shareholder voting at the 2020 Annual General Meeting of the Company is set out on Boku’s website.
The Group’s approach to investor and shareholder engagement is described under Principle 2 above. Annual Reports, Annual General Meeting notices, regulatory announcements, trading updates and other governance related materials for 2020 and retrospective years are available from the Company’s website.

The Company is subject to the exclusive jurisdiction of the Delaware Courts and the Company’s Certificate of Incorporation and Bylaws. As such, the rights of shareholders may differ from the rights of shareholders in a UK incorporated company. The Company’s main countries of operation are the United States of America, United Kingdom and India.

All references used herein are references to sections contained in Boku’s Annual Report 2020.